Judge suspends Arctic drilling, orders new environmental report

Alaska drilling

Tim Aubry / AFP/Getty Images

Salvage teams conduct an assessment of Shell's Kulluk drill barge in January 2013 off Alaska's Kodiak Island. Environmentalists have been concerned about the potential effects of drilling in the region.

Salvage teams conduct an assessment of Shell's Kulluk drill barge in January 2013 off Alaska's Kodiak Island. Environmentalists have been concerned about the potential effects of drilling in the region. (Tim Aubry / AFP/Getty Images)

Paresh Dave

In the ongoing battle over offshore drilling, a federal judge in Alaska told regulators Thursday to redo an environmental impact study that underestimated the amount of recoverable oil and, potentially, the risks to delicate Arctic habitat.

The decision by U.S. District Judge Ralph Beistline stopped short of scrapping the $2.6 billion in leases, however. His ruling followed an appeals court decision in January that federal officials had arbitrarily decided drilling companies could extract 1 billion barrels of oil from the shallow waters off the northwest coast of Alaska. That figure led to a misguided environmental study, the U.S. 9th Circuit Court of Appeals said.

Now, the U.S. Department of the Interior must redo the supplemental analysis using what’s expected to be a much higher estimate for the amount of oil extractable. In the meantime, no drilling for oil or natural gas can take place.

U.S. Sen. Mark Begich (D-Alaska) called the order “good news," saying it “should lead to resumption of oil and gas development in our state’s promising offshore” by next summer.

Earth Justice attorney Erik Grafe, who opposes drilling and who helped bring the lawsuit, also hailed the decision. The opposing sides had worked for the past two months to negotiate a deal, which the judge adopted almost completely.

Grafe told the Los Angeles Times the redo was a “good outcome,” considering that the erroneous figure of 1 billion barrels “infected every part of the original analysis.”

He said the new report would likely show that oil companies would bring far more boats, planes, drill rigs and pipelines. As a result, he expects the analysis to show a much greater disturbance to the habitat of whales, walruses, polar bears and other animals.

In light of the new analysis, the Bureau of Ocean Energy Management will have to decide whether to move forward with or cancel the agreed-upon leases with Royal Dutch Shell, ConocoPhillips and other companies.

“We’re hopeful the government will come to the conclusion that it’s wrong to sell the leases,” Grafe said. “I’m not sure how long it will take for the new study, but the government has a lot of work ahead of itself. It’s a big opportunity for the government to choose a better path in the Arctic.”

The Bureau of Ocean Energy Management declined to comment. The agency has maintained that the 1-billion-barrel estimate made economic sense because the oil companies have said drilling in the area is a major technical challenge.

A week after the January ruling, Shell abandoned exploration efforts in the Arctic for the rest of this year.

Federal officials will be able to process and review Arctic drilling applications, but they won’t be able to approve them until the environmental study is complete. If drilling ultimately moves forward, continuing the paperwork process allows the companies to quickly get started in the Chukchi Sea.

“This lawsuit was just another delaying tactic by those who oppose responsible development in Alaska, so Alaskans should be relieved that we’re now getting on with the business we know how to do so well,” Begich said in a statement. The senator has asked federal officials to extend the 10-year deals because the lawsuits have cost a chunk of time since they were brought in 2008.